Correlation Between Editas Medicine and Ginkgo Bioworks
Can any of the company-specific risk be diversified away by investing in both Editas Medicine and Ginkgo Bioworks at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Editas Medicine and Ginkgo Bioworks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Editas Medicine and Ginkgo Bioworks Holdings, you can compare the effects of market volatilities on Editas Medicine and Ginkgo Bioworks and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Editas Medicine with a short position of Ginkgo Bioworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Editas Medicine and Ginkgo Bioworks.
Diversification Opportunities for Editas Medicine and Ginkgo Bioworks
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Editas and Ginkgo is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Editas Medicine and Ginkgo Bioworks Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ginkgo Bioworks Holdings and Editas Medicine is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Editas Medicine are associated (or correlated) with Ginkgo Bioworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ginkgo Bioworks Holdings has no effect on the direction of Editas Medicine i.e., Editas Medicine and Ginkgo Bioworks go up and down completely randomly.
Pair Corralation between Editas Medicine and Ginkgo Bioworks
Given the investment horizon of 90 days Editas Medicine is expected to under-perform the Ginkgo Bioworks. But the stock apears to be less risky and, when comparing its historical volatility, Editas Medicine is 1.35 times less risky than Ginkgo Bioworks. The stock trades about -0.32 of its potential returns per unit of risk. The Ginkgo Bioworks Holdings is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 827.00 in Ginkgo Bioworks Holdings on August 27, 2024 and sell it today you would lose (109.00) from holding Ginkgo Bioworks Holdings or give up 13.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Editas Medicine vs. Ginkgo Bioworks Holdings
Performance |
| Timeline |
| Editas Medicine |
| Ginkgo Bioworks Holdings |
Editas Medicine and Ginkgo Bioworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Editas Medicine and Ginkgo Bioworks
The main advantage of trading using opposite Editas Medicine and Ginkgo Bioworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Editas Medicine position performs unexpectedly, Ginkgo Bioworks can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ginkgo Bioworks will offset losses from the drop in Ginkgo Bioworks' long position.| Editas Medicine vs. Beam Therapeutics | Editas Medicine vs. Crispr Therapeutics AG | Editas Medicine vs. Caribou Biosciences | Editas Medicine vs. Verve Therapeutics |
| Ginkgo Bioworks vs. Eliem Therapeutics | Ginkgo Bioworks vs. HCW Biologics | Ginkgo Bioworks vs. Scpharmaceuticals | Ginkgo Bioworks vs. Milestone Pharmaceuticals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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